Both buyers and sellers of a product, such as a good or service, in a specific market benefit from determining the need of the product. By having quantitative information on the need of a product, a buyer knows how much he should be willing to spend to acquire the product. Similarly, having quantitative information on the need of a product allows a seller to know how much he should be willing to accept in exchange for the product. For example, both an employer and a potential employee need to know the worth of the employee's skills. The employer must know the optimum salary amount the employee should receive. An employer that offers an employee a salary that is too high will lose money that would have been better spent elsewhere. On the other hand, an employer that offers a salary that is too low will most likely not be able to attract and retain acceptable candidates for a job position, since talented workers will go to competing businesses instead.
A survey is a common method of obtaining relevant quantitative information such as quantities, prices, revenue, costs, income and expenditure. Surveys acquire information by polling survey participants such as individuals, households, businesses or a combination thereof. Survey participants answer questions, and the answers of the participants are collected and used to estimate characteristics of a larger population.
In general, surveys which acquire information on labor markets are generated by five sources: the government, professional or trade associations, research companies, recruitment companies and published sources.
The government, specifically the Bureau of Labor Statistics (BLS), polls a number of firms from a list of state unemployment insurance reports to create an Employee Benefits Survey. Professional or trade associations may include associations of universities in a region, associations of businesses in a region, associations of businesses employing particular types of labor and associations of professionals in a particular field. These associations take a survey of their members, and may include survey information on the members themselves or their employees. Typically, a membership fee and various survey information fees drive the cost of the association's survey. Research companies, in particular human resource consulting firms, compile survey information and sell reports containing subsets of the survey information. Recruitment companies present salary information obtained from surveys of client corporations in order to recruit job candidates. Published sources, such as printed magazines, newsletters, periodicals and the Internet, may either survey subscribers or survey the results of research firms and consulting firms.
In general, conventional methods of obtaining quantitative information on the need of a product suffer from several shortcomings. For example, the BLS Employee Benefits Survey covers extremely broad classifications of labor across the set of industrial classifications of businesses, and is not intended to be used to assess the markets for specific types of jobs. The surveys of professional or trade associations measure a restricted segment of the market, thereby skewing the results away from true market values. Research companies do not typically collect all relevant information in one report. Recruitment companies provide information which is intended to lure candidates into certain job placement services. Furthermore, the salary information provided by recruitment companies typically represents an association of businesses rather than the relevant market as a whole. Finally, periodicals usually present information which is too broad to be of use in determining salary goals.
There is also no sophisticated analysis of the information obtained by surveys. For example, most salary survey reports simply present salary ranges of the survey participants, yielding only a minimum salary and a maximum salary for a group of survey participants. From this information alone, it is extremely difficult to estimate the salary of any one employee or potential employee, and it is likewise difficult to estimate the likelihood that the salary estimate of an employee is correct.
Another drawback is the large expense involved in performing a survey. Creating, distributing and collecting surveys is a time consuming process, and the accuracy of information submitted by survey participant,, is critical. A survey questionnaire must first be developed, which can be difficult because each question must be worded as not to favor a particular response. For example, a first question "How long have you been unable to find a job?" in theory elicits the same information as a second question "How long have you been unemployed?". However, the survey participant may interpret an answer to the first question as an admittance of a personal inability that many unemployed people would reject. A survey is also expensive since a highly skilled survey practitioner is required to obtain reliable and useful information from survey participants. For example, voice inflection of the survey practitioner and presentation by the survey practitioner can unintentionally signal to the survey participant a desired response. Creating a list of survey participants, comprising names, phone numbers and addresses of appropriate participants who are randomly selected from the population or who represent desirable demographics, is also an expensive and time-consuming task. The collected survey information, which is generally hand-written, must then be transferred to a data base.
Still another drawback of surveys is the type of information a survey obtains. Salary surveys, for example, present the current salaries of employees. Surveys do not provide competitive salary amounts which reflect current market prices. Surveys provide information best suited for comparative evaluation of corporate employee pay scales, rather than salary information on current job markets. Furthermore, salary surveys are typically overly broad and thus not of much use in determining salary goals for a particular individual with a specific set of skills and a particular amount of experience.
Conventional salary estimation systems are typically designed to aid human resource departments determine competitive salary grade structures for each type of job within an organization's job hierarchy. Such estimation systems are geared towards the internal cost analysis and decision making of a firm. Employee survey statistics are used to assess and ensure the competitiveness of the cost and compensation structure of the firm. Average salaries, distribution quartiles and distribution ranges of salaries are used for comparative positioning of the salary grades, for setting a base salary level, and for determining high and low salary levels.
Unfortunately, salary grades are not equivalent to years of experience in a job, nor are salary grades defined in terms of a quantitatively measurable job property or characteristic. Since salary grades are not dependent on numerical quantity, they can not be statistically ascertained.
It would be advantageous to provide a system for generating accurate market price estimations for a product which is not as expensive, as conventional methods for generating market price estimations. It would be further advantageous to provide a system for generating accurate market price estimations for a product which has a numeric, variable quality attribute.